A Deep Dive into Binance’s Exchange Balances vs Proof-of-Reserves

With investors on high alert following the FTX crash, crypto exchange Binance has recently been under the spotlight. Mazars, an accounting agency, recently audited Binance’s Proof-of-Reserves report. Some market participants, however, argued that it doesn’t provide true representation of the exchange’s financial situation.

Glassnode, an on-chain data source, has delved deeper into the subject, examining Binance’s exchange balances and comparing them to its proof-of-reserves.

According to Glassnode statistics, Binance has 584.6k BTC in total Bitcoin holdings, compared to 359.3k BTC in self-reported Proof-of-Reserves wallets.

According to the report, the Binance exchange balances are more volatile this month, stating:

If we look to BTC inflow/outflows, we can see there have been significant late withdrawals. 13-Dec recorded 57.3k BTC in outflows, the largest net BTC outflow from Binance in history.

For Ethereum, the Proof-of-Reserves and exchange balances appear to be comparable, totaling approximately 4.65 million ETH.

With one exception, ETH flows in December were generally stable. On December 13, there was a massive 1-day outflow of 456.7k ETH. The stablecoin outflows, however, have been rather substantial.

Binance CEO Changpeng Zhao reaffirmed their position in an interview with CNBC on Thursday. He said the cryptocurrency exchange has a solid financial foundation.

«The well run #crypto exchanges should hold user assets one to one. People can withdraw 100% of the assets they have on @binance. We will not have an issue,» says @cz_binance. «In crypto, there’s no central bank printing money to bail out banks when there’s a liquidity crunch.» pic.twitter.com/eAf2n7mAg0

— Squawk Box (@SquawkCNBC) December 15, 2022

Over the past 30 days, Binance has seen a total outflow of $3.2B in stablecoins— $USDT, $USDC, $BUSD, and $DAI.Accordingly, 66% of stablecoin outflows are attributed to Binance.

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